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13. An asset management company runs a mutual fund with the following portfolio of assets: Assume that T- Bonds are from 7 different issues, all
13. An asset management company runs a mutual fund with the following portfolio of assets: Assume that T- Bonds are from 7 different issues, all of them representing a percentage lower than 30%. Whit this information you are requested to compute: a. Total market value of the portfolio b. Considering a management fee of 0.5% and a deposit fee of 0.10%; compute the income for the management company and for the deposit company. c. Unit value (NAVPS) assuming that there are 2,000 units in the fund d. Does the fund comply with the 5-10-40 diversification requirements? Why? If not, propose solutions. 14. Calculate the duration of a $1,0006% coupon bond with three years to maturity. Assume that all market interest rates are 7%. 15. Consider the bond in the previous question. Calculate the expected price change if interest rates drop to 6.75% using the duration approximation. Calculate the actual price change using discounted cash flow
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